What is Urban Renewal?
Urban renewal is a powerful funding tool currently in place in over 75 communities across Oregon. It is used to help areas that are not performing well and/or that lack public infrastructure by funding projects that fix identified problems and spur private investment that would otherwise not happen under normal market conditions.
What does Urban Renewal do?
Urban renewal uses property taxes from within an area to fix identified problems in that same area. It often focuses on improving an area’s transportation and utility infrastructure since these kinds of improvements can unlock an area’s development potential. Urban renewal is also used to attract and retain small businesses and develop public spaces such as parks, plazas, and trails.
How does Urban Renewal work?
Urban renewal is funded through Tax Increment Financing (TIF). When an urban renewal area (URA) is established, the County Assessor determines the current assessed value of all property within the area, and freezes that tax base. Tax revenue from this “frozen base” continues to go to taxing districts annually for the life of the URA. Tax revenue on any increase in property value that would occur anyway—from new development and/or appreciation—is allocated to the Urban Renewal Agency for projects in the URA. This increase above the frozen base is also called the “increment.” When the urban renewal area expires, the frozen base also expires, and the local taxing districts resume receiving taxes on the full assessed value of the area.
Who is affected by Urban Renewal?
Urban renewal has a financial effect on local taxing districts, but the impact is different for schools than for other districts. An urban renewal area does not directly affect school districts because schools are funded through the State School Fund. Property tax revenues are an offset under the statewide school funding formula, and property tax revenues foregone by school districts because of urban renewal may be replaced with other State School Fund revenues.
Other taxing districts, such as Tualatin Valley Fire & Rescue, are directly affected by urban renewal. While an urban renewal area is active, revenue from that area is frozen, which means that taxing districts will not receive as much money as they would have otherwise received for the life of the urban renewal area. In essence, taxing districts forego some revenue now in exchange for an increase in their total property tax base later as a result of urban renewal investments. Since the goal of urban renewal is to spur development that would otherwise not have occurred, taxing districts can expect to receive more tax revenue in the future than they would have had urban renewal never existed.
Is Urban Renewal a new tax?
Urban renewal is not a new tax on property anywhere in the city—urban renewal only changes how tax revenue is allocated. The revenue to pay for projects in an urban renewal area is self-generated by new development and property appreciation in the urban renewal area. Tax bills for property owners within an urban renewal area do not increase because of urban renewal; urban renewal only changes how tax revenues are allocated.
Why does Urban Renewal show up on my tax bill?
Voters approved the formation of an urban renewal area in Downtown Tigard in 2006. If you own property in the city, urban renewal shows up as a line item on your tax bill whether or not you own property in the urban renewal area, which can be confusing.
Technically, a portion of your taxes are going to the urban renewal area, but that’s only because of a 2002 court decision and subsequent 2003 legislation that requires the County Assessor to calculate the division of taxes in a very specific way. Even though the Downtown Tigard urban renewal area is not a taxing district, your tax bill treats it like a taxing district by showing it as a line item with a separate tax rate as required by law. In actuality, however, this line item does not represent a new tax, or result in a larger tax bill than would otherwise occur. Instead, it represents a division of tax dollars, collected from all properties in the city in an amount equal to the growth in assessed value inside the urban renewal area. When the Downtown Tigard urban renewal area expires, your property tax bill will not decrease. Your tax dollars will simply be redistributed to the existing taxing districts.
The Downtown Urban Renewal Plan was approved by voters in 2006 and an amendment to the Plan was approved in May 2017. With the amendment, the Town Center Development Agency (TCDA) will be able to add seven new tax lots to the urban renewal area. With this expansion the TCDA will be able to fund more projects from the original plan. Substantial Amendment
Implementation of the City Center (Downtown) Urban Renewal Plan was approved by voters in 2006. Funding for urban renewal projects was limited by the Great Recession. The approved area expansion includes the addition of seven new tax lots (37.74 acres). The existing Tigard City Center Area is 191.22 acres in size. The approved amendment increases the total area (shown in the figure) to 228.96 acres, including 43.36 acres of right of way. State law ORS 457.220(3) limits increases to the size of an urban renewal district to 20% of a district's original size.
This amendment will help the agency (TCDA) fund more of the projects identified in the City Center (Downtown) Urban Renewal Plan, without increasing the plan duration or adding to the voter approved maximum indebtedness of $22 million.DOWNLOAD:» City Center Urban Renewal Plan Substantial Amendment (shows changes in plan)
» Report Accompanying City Center Urban Renewal Plan Substantial Amendment
» Current City Center Urban Renewal Plan
The City Center (Downtown) Urban Renewal Plan established the 193-acre Urban Renewal Area. In 2006, Tigard voters approved the plan and authorized tax increment financing. The plan created the tools and funding for downtown revitalization. The Urban Renewal Plan has a maximum indebtedness of $22 million.
These are the goals of the City Center (Downtown) Urban Renewal Plan:
Goal 1: Revitalization of the downtown should recognize the value of natural resources as amenities and as contributing to the special sense of place.
Goal 2: Capitalize on commuter rail and Fanno Creek as catalysts for future investment and development.
Goal 3: Downtown’s transportation system should be multi-modal, connecting people, places and activities safely and conveniently.
Goal 4: Downtown’s streetscape and public spaces should be pedestrian-friendly and not visually dominated by the automobile.
Goal 5: Promote high quality development of retail, office and residential uses that support and are supported by public streetscape, transportation, recreation and open space investments.
Tax increment revenues generated in the urban renewal district will be used to support investments to attract private investment and facilitate the area's redevelopment. Urban renewal projects and programs include the Tigard Downtown Improvement Plan catalyst projects and other public infrastructure as well as technical assistance programs such as a façade improvement program, rehabilitation/redevelopment incentives, and loan programs.
The urban renewal plan is implemented by the City Center Development Agency. The Mayor and members of the Tigard City Council serve as the board of the Agency. The board is advised on policy, budget, and implementation of urban renewal projects by the nine member City Center Advisory Commission.
Read the City Center Urban Renewal Plan and Accompanying Report.